Weeks into his job as CEO of Tesoro Corp., Greg Goff is securing the company’s top management as he strives to return the San Antonio-based refiner to profitability, the San Antonio Express-News reported.
Goff offered Everett Lewis, Tesoro’s executive vice president and chief operating officer, a $400,000 cash retention bonus “as an incentive for his continued service to the company,” should he agree to stay through Jan. 31, according to a regulatory filing.
In a letter to Lewis, Goff said the company “recognizes the leadership and industry experience you bring to Tesoro, and that you could choose to retire at any time. Your commitment and contribution to Tesoro’s success is not only appreciated but critical during this time of leadership transition.”
Lewis accepted the offer on June 9, according to a document filed with the Securities and Exchange Commission. His agreement calls for his bonus to be paid six months after the retention period ends on Jan. 31. If Lewis resigns before Jan. 31 he will forfeit the bonus, Goff’s letter said.
A Rocky Road Ahead
Goff, a former senior vice president of Houston-based ConocoPhillips Corp., took the helm as CEO of Tesoro on May 1, and his offer to Lewis comes at a time when the company faces a number of obstacles. Among them, Tesoro’s executive team has been thinned due to a number of recent retirements, including Chairman and CEO Bruce Smith, 66, retired June 4; Chief Financial Officer Greg Wright, 60, retired May 5; and William Finnerty, executive vice president of strategy and development, 61, resigned March 31 and now serves as a consultant to Goff at Goff’s request.
In addition, Tesoro has struggled with weak margins as the recession has depressed demand for its fuels. The company posted a loss of $155 million in the first quarter of 2010 and a loss of $140 million for all of 2009. Meanwhile, its stock has declined 23% since the first of the year. Its shares closed Friday at $11.37, down 10 cents, in New York Stock Exchange trading.
Consequently, Goff told the San Antonio Express-News he’s evaluating the company’s seven refineries. “We are going through each refinery and the marketing associated with that refinery and critically evaluating its position in the marketplace – its strengths, its weaknesses. We need to be able to improve the performance of each one of the assets,” he said.
Goff expects to present a plan for boosting the plants’ performance to the company’s board of directors in November or December. He hasn’t ruled out the possibility of Tesoro buying another refinery in the future, if it’s judged a good strategic fit for company.
“We’d take a look,” Goff said. “We need to look at all the different options.” But first, he said, “we need to spend some time focusing on the direction of the company.”